Press Release

Aztech Witnesses Continuous Growth in

ADSL2/2+ Broadband Modem

· Estimated orders of 3.5 million units valued at US$50 million

·

SINGAPORE, 25

growth of its ADSL2/2+ broadband modem product sector. During its half-year results

announcement in July this year, the Group reported that there was continual strong demand for

its ADSL2/2+ broadband modems and expects to hit record number this year.

The Group is now pleased to announce that to-date, it has received firm orders for 1.5 million

units of ADSL2/2+ broadband modems under a contract win to a key customer in North

America, to be delivered by end of the year. The Group further projected additional orders of 2

million units for FY2008. The entire contract is valued at approximately US$50 million.

Asymmetric Digital Subscriber Line (?ADSL?) is a commonly used data communications

technology that tranmits Internet data over copper telephone lines faster than a conventional

56k analog modem. In the first quarter of 2007, the worldwide broadband lines totaled 298

million, of which ADSL dominated the sector with 197million subscribers. The United States has

the biggest number of ADSL lines, with 60.4 million subscribers to date while increasing

approximately 2.9 million lines over each quarter. Other top ADSL countries include China,

Germany, UK, France, Japan and Korea.

Aztech CEO and Chairman, Michael Mun comments, ?With our 10 years of experience in

broadband equipment coupled with well-established manufacturing capabilities, we will continue

to tap on the expanding ADSL2/2+ broadband usage in homes and offices. Today, we also see

strong broadband penetration to more developing countries. Some of the markets we are

focusing on are Eastern Europe, South America, South East Asia and Middle East where we

see potential increment in number of ADSL subscribers.?

The winning of this contract solidifies Aztech?s long-running, successful business track record as

a leading ADSL2/2+ broadband equipment manufacturer and supplier. Fully designed in-house,

the modem denotes Aztech?s ability to comply with the stringent requirements of the client.

Providing design excellence with high quality in the product, Aztech is committed to achieving

fast turnaround time and optimizing its client?s operations.

?In line with the Group?s on-going forward looking strategy, Aztech is also developing new

products specifically targeted at next generation of broadband ? VDSL (Very High Speed DSL

line) and FTTH (Fiber-To-The-Home) technologies

broadband development is to meet the increasing popularity and demand for value-added

Press Release

Aztech Witnesses Continuous Growth in

ADSL2/2+ Broadband Modem

· Estimated orders of 3.5 million units valued at US$50 million

·

SINGAPORE, 25

growth of its ADSL2/2+ broadband modem product sector. During its half-year results

announcement in July this year, the Group reported that there was continual strong demand for

its ADSL2/2+ broadband modems and expects to hit record number this year.

The Group is now pleased to announce that to-date, it has received firm orders for 1.5 million

units of ADSL2/2+ broadband modems under a contract win to a key customer in North

America, to be delivered by end of the year. The Group further projected additional orders of 2

million units for FY2008. The entire contract is valued at approximately US$50 million.

Asymmetric Digital Subscriber Line (?ADSL?) is a commonly used data communications

technology that tranmits Internet data over copper telephone lines faster than a conventional

56k analog modem. In the first quarter of 2007, the worldwide broadband lines totaled 298

million, of which ADSL dominated the sector with 197million subscribers. The United States has

the biggest number of ADSL lines, with 60.4 million subscribers to date while increasing

approximately 2.9 million lines over each quarter. Other top ADSL countries include China,

Germany, UK, France, Japan and Korea.

Aztech CEO and Chairman, Michael Mun comments, ?With our 10 years of experience in

broadband equipment coupled with well-established manufacturing capabilities, we will continue

to tap on the expanding ADSL2/2+ broadband usage in homes and offices. Today, we also see

strong broadband penetration to more developing countries. Some of the markets we are

focusing on are Eastern Europe, South America, South East Asia and Middle East where we

see potential increment in number of ADSL subscribers.?

The winning of this contract solidifies Aztech?s long-running, successful business track record as

a leading ADSL2/2+ broadband equipment manufacturer and supplier. Fully designed in-house,

the modem denotes Aztech?s ability to comply with the stringent requirements of the client.

Providing design excellence with high quality in the product, Aztech is committed to achieving

fast turnaround time and optimizing its client?s operations.

?In line with the Group?s on-going forward looking strategy, Aztech is also developing new

products specifically targeted at next generation of broadband ? VDSL (Very High Speed DSL

line) and FTTH (Fiber-To-The-Home) technologies

broadband development is to meet the increasing popularity and demand for value-added

Aztech Systems; HOLD S$0.43 (Downgrade from BUY) Price Target : 12-Month S$ 0.50 (Prev S$ 0.94)

Aztech?s earnings prospects are not as exciting as previously expected. There are three key changes : (1)

Change in the product mix due to a major slowdown from a key customer (2) Delay in the launch of new

products (3) Higher operating costs from inflation in China. On the positive side, the company is running at

full capacity. ADSL modems and Homeplug adapters continue to be the main drivers. Overall, we have

lowered our FY07 and FY08 earnings estimates by 29% and 33% respectively. Our revised one-year target